Coronavirus Crisis Forces UK Banks To Axe Billions In Payouts

A woman wearing a face mask passes a Public Health England sign, warning passengers arriving on flights into the UK, that a virus, Coronavirus, has been detected in Wuhan in China, at Terminal 4 of London Heathrow Airport in west London on January 28, 2020. DANIEL LEAL-OLIVAS / AFP

 

Britain’s banking sector on Wednesday scrapped billions of pounds (dollars) in shareholder dividends and share buybacks after the Bank of England requested the move to boost liquidity and help cope with the coronavirus crisis.

The British central bank said in a statement that its Prudential Regulation Authority division had asked lenders to stop the payments until the end of the year.

It also said it expected them not to pay any cash bonuses to top staff.

In response, Barclays, HSBC, Lloyds Banking Group, Royal Bank of Scotland, Santander and Standard Chartered all stated that they will scrap dividends and not pursue buybacks.

“The PRA welcomes the decisions by the boards of the large UK banks to suspend dividends and buybacks on ordinary shares until the end of 2020, and to cancel payments of any outstanding 2019 dividends in response to a request from us,” the regulator said in a statement.

“The PRA also expects banks not to pay any cash bonuses to senior staff, including all material risk takers, and is confident that bank boards are already considering and will take any appropriate further actions with regard to the accrual, payment and vesting of variable remuneration over coming months.”

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Britain’s top banks have enough capital to weather severe recessions in both Britain and globally, as markets brace for a potentially huge downturn driven by the COVID-19 outbreak, according to the regulator.

“Although the decisions taken today will result in shareholders not receiving dividends, they are a sensible precautionary step given the unique role that banks need to play in supporting the wider economy through a period of economic disruption, alongside the extraordinary measures being taken by the authorities,” it said.

The UK lenders have become the latest corporate giants to scrap dividends as big global businesses scramble to save cash and safeguard against worsening virus turmoil.

The news, combined with the worsening COVID-19 crisis, sent banking shares tumbling on London’s benchmark FTSE 100 index, which sank three percent overall in early morning deals.

“UK banks, as many businesses across the world, are scrapping dividends due to an increased need of cash to survive the coronavirus crisis in the short run,” said Swissquote Bank analyst Ipek Ozkardeskaya.

“Even if we may see a negative knee-jerk reaction from investors, the decision to hold onto the cash is the right one from a medium- and long-term perspective.

“In this respect, we expect to see a certain level of tolerance for ditched dividends,” Ozkardeskaya told AFP.

Lawan, Gbajabiamila Meet Ministers Over Planned 2020 Budget Review

 

The Leadership of the National Assembly have held a meeting with some Ministers and Heads of agencies from the Executive arm of Government to brainstorm on the impact of Coronavirus pandemic on the Nigerian economy.

The meeting which took place on Wednesday specifically touched on the planned review of the 2020 budget and Medium Term Expenditure Framework and Fiscal Strategy Paper passed late last year by the National Assembly.

President of the Senate, Ahmad Lawan, who presided over the meeting, in his opening remarks said that an immediate review of the 2020 budget and Medium Term Expenditure Framework is imperative, particularly against the backdrop of the impact of the Coronavirus pandemic on the global economy.

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The meeting, which lasted almost four hours, according to Lawan, was summoned to “discuss the proposed review of the 2020 budget and the Medium Term Expenditure Framework.”

“If we have to review the budget itself, we have to consider the MTEF/FSP.

“Even in sickness, we need the government to provide services.

“The impact of COVID-19 is well known to all of us in terms of health and the economy.

“Here, we will be talking of revenues that we estimated to fund the budget 2020.

“Because the oil price has gone so low due to the impact of COVID-19, the Minister of State should be able to tell us where we will be in the next six months or so.

“We should have concepts that can deliver fast and are sustainable.

“Anything that we do that cannot provide succor and relief to our people will lead to catastrophe,” the Senate President warned.

Also speaking, the Speaker of the House of Representatives, Rt. Hon. Femi Gbajabiamila said the meeting was very timely.

“Taking a cursory look at some of the papers (presentations), I think this meeting is actually very timely and very important because we live in very unusual time and it’s time we start thinking outside the box to see how we can stabilise our economy and the direction it’s going to take,” the Speaker said.

In her presentation, the Minister of Finance, Zainab Ahmed, explained that “prior to COVID-19 and Oil price decline, the Nigerian economy was already fragile and vulnerable.”

According to her, due to the global economic downturn precipitated by the impact of the Coronavirus pandemic, international oil prices plunged as low as $22 (USD) per barrel on the international market.

She added that the impact of the pandemic which resulted in international crisis created a disruption in travel and trade, and put “increasing pressure on the naira and foreign reserves as the crude oil sales receipts decline and the country’s micro-economic outlook worsens.”

Ahmed said that in view of Nigeria’s economic realities, the Crisis Management Committee constituted by President Muhammadu Buhari in response to the COVID-19 and Oil Price Decline Crisis expressed concern that “the decline in international oil prices or domestic production may be magnified if a severe outbreak of the pandemic occurs in Nigeria.”

Accordingly, the Finance Minister proposed a review of the 2020 budget using a US$30 per barrel price benchmark to prepare for the worst-case scenario, as well as insulate the Nigeria economy against any form of unexpected crisis.

She also told the leadership of the National Assembly that budgeted revenues for the Nigeria Customs Service have been reduced from N1.5 trillion to N943 billion “due to anticipated reduction in trade volumes; and privatization proceeds to be cut by 50 per cent, based on the adverse economic outlook on sales of the Independent Power Projects (IPPs) and other assets.”

Similarly, Ahmed disclosed that the Federal Government has undertaken cuts to Revenue-related expenditures for the Nigerian National Petroleum Corporation (NNPC) for several projects included in the 2020 Appropriation Act passed by the National Assembly in December 2019.

“The Federal Government is working on Fiscal Stimulus Measures to provide fiscal relief for Taxpayers and key economic sectors; incentivize employers to retain and recruit staff during the economic downturn; stimulate investment in critical infrastructure; review non-essential tax waivers to optimize revenues; and compliment monetary and trade interventions to respond to the crisis,” the Finance Minister disclosed.

She added that the Federal Government had made provision for health sector interventions by introducing import duty waivers for essential input for pharmaceutical firms; tax waivers on new equipment; and deferment of tax to increase production.

Ahmed further disclosed that the Federal Government would be releasing the total sum of N6.5 billion in two tranches (N1.5 billion and N5 billion) to the National Centre for Disease Control (NCDC) as intervention to assist in the fight against the spread of the COVID-19 disease in Nigeria.

Also, she stated that the Lagos State Government would receive financial support from the Federal Government to the tune of N10 billion to combat Coronavirus spread in the state.

In addition, she informed the lawmakers that Nigeria had received a grant of US$18.2 million from Japan for strengthening seven National Centre for Disease Control (NCDC) centres across the country.

The Finance Minister said that the sum of N1billion would be released by government to Pharmaceutical firms in the country.

In his presentation, the Governor of the Central Bank, Godwin Emefiele said, “while we would expect to see a decline in our expected growth projection for 2020 relative to 2019, the exact impact will be dependent on how well the coronavirus is contained over the next few months, and how long low oil prices persist.”

Members of the National Assembly Leadership present at the meeting included: Deputy Senate President, Ovie Omo-Agege; Deputy Speaker, Idris Wase; Senate Leader, Yahaya Abdullahi; Leader of the House, Ado Doguwa; Deputy Senate Leader, Ajayi Boroffice; Senate Minority Leader; Enyinnaya Abaribe; Minority Leader of the House, Tony Elumelu; Senate Deputy Whip, Aliyu Sabi Abdullahi; Deputy Minority Whip, Philip Aduda.

Others are Senator Barau Jibrin, Chairman, Senate Committee on Appropriations; and Senator Uba Sani, Chairman, Senator Committee on Banking, Insurance and other Financial Institutions.

Members from the Executive present at the meeting which held at the National Assembly include Minister of State for Budget and National Planning, Prince Clem Agba; Minister of Petroleum Resources (State), Timipre Sylva.

Others are the Governor of the Central Bank of Nigeria, Godwin Emefiele; Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, and Senior Special Assistant to the President on National Assembly Matters, Senator Babajide Omoworare.

S.Africa Stock Market Tumbles As Coronavirus Restrictions Intensify

 

Cyril Ramaphosa delivers a speech during his inauguration as South African President, at Loftus Versfeld stadium in Pretoria, on May 25, 2019.

 

The Johannesburg Stock Exchange (JSE) plunged 12 percent on Monday as South Africa imposed tough restrictions after declaring a national state of disaster in a bid to curb the spread of the novel coronavirus.

President Cyril Ramaphosa announced that Africa’s most developed nation would close its borders from Wednesday to all foreigners from countries highly impacted by the COVID-19 pandemic.

Schools are closing down and gatherings of more than 100 people have been prohibited.

The JSE fell below 38,784 points on Monday, its lowest level since August 2013, following a downward trend in markets around the world sparked by concerns about the economic fallout of Covid-19.

The JSE Africa All-Share Index tumbled as much as 12 percent, while the rand currency lost 2.2 percent against the US dollar to trade at 16.64 rand.

Nedbank economist Nicky Weimar said South Africa’s economy and markets were being hit on multiple fronts by “weak demand (both locally and abroad), contained inflation, the volatile rand and an uncertain global environment due to the coronavirus.”

Shares in the industrial metals, food producers and mining industries also fell.

To date 62 people in South Africa have tested positive for the virus — the second-highest number of cases in Africa after Egypt, which has reported at least 110 cases.

South Africa’s economy has already been battered by internal factors such as power outages and weak business confidence.

It slumped into recession in the last quarter of 2019.

Economists forecast that the central bank will cut interest rates by at least 50 basis points.

Finance Minister Tito Mboweni on Monday said despite having funds available through the National Disaster fund, the country may need to set aside further funding to deal with the coronavirus outbreak.

The impact of the virus on an already struggling economy has piled pressure on Ramaphosa who took over from graft-tainted Jacob Zuma two years ago promising a new start.

“We are going through a period which we have never gone through since (end of apartheid in 1994),” he told reporters on Monday. “It is going to be a testing period on all of us”.

“It is going to have a negative impact on our economy, our economy which is already in technical recession”.

AFP

Italy Faces Recession As Coronavirus Hits Economy

A resident wearing a protective respiratory mask speaks on his mobile phone in a street of Codogno, southeast of Milan, on February 22, 2020. An Italian man became the first European to die after being infected with the coronavirus on February 21, just hours after 10 towns in the country were locked down following a flurry of new cases. Miguel MEDINA / AFP

 

Italy’s economy performed woefully in 2019 and is set to do even worse this year due to the coronavirus, with the threat of recession looming large, experts said Monday.

“In the best scenario for Italy, we expect zero growth (in 2020) with a negative first quarter followed by a slow recovery,” OECD chief economist Laurence Boone said.

The economy expanded last year by just 0.3 percent — its worst figure since 2014, when gross domestic product (GDP) growth was zero.

Europe had fared badly across the board recently, weighed down by Brexit and US President Donald Trump’s protectionist threats.

But Italy, the third largest economy in the eurozone, has lagged well behind the bloc’s 1.2 percent growth.

The economy is traditionally export-driven and has been hit hard by global trade tensions, political uncertainty at home — two general elections in two years — and a slowdown in Europe, particularly in Germany.

Prime Minister Giuseppe Conte’s government has had some good news — the public deficit fell to 1.6 percent of GDP last year from 2.2 percent in 2018, while the debt ratio at least remained stable at 134.8 percent, well above the EU limit of 60 percent.

– Virus sinks recovery –

But just as Italy was expecting a gradual improvement in both growth and debt, the coronavirus epidemic struck.

The country is the worst-hit in Europe, with 1,694 positive cases and 34 deaths, one of the largest outbreaks outside Asia, according to figures published Sunday.

Wealthy Lombardy and Veneto, regions that alone account for some 30 percent of Italy’s GDP, have been hit hardest — with 11 towns between them forced into lockdown in a bid to contain the virus.

The government initially expected 0.6 percent growth in 2020, while the European Commission had forecast 0.5 percent.

But that was before the virus disrupted manufacturing supply chains, travel and tourism, with airlines cutting flights to northern Italy, trade fairs postponed, sports events cancelled and employees forced to work from home.

“After Italian GDP contracted sharply in fourth quarter of last year, the coronavirus outbreak spells the near-certainty of a renewed contraction in the first quarter that would leave Italy in a new recession,” says Oxford Economics expert Nicola Nobile.

Milan’s FTSE Mib initially slumped more than 3.0 percent Monday as anxiety over the virus continued unabated.

With businesses pleading for help, Italy Economy Minister Roberto Gualtieri announced a 3.6 billion euro support package — equivalent to 0.2 percent of the country’s GDP — to help the economy weather the storm.

AFP

EAC Concerned About Economic Growth, Asks Buhari To Strengthen Agencies, Improve Education

President Muhammadu Buhari with members of the Economic Advisory Council (EAC) at the Presidential Villa in Abuja on February 6, 2020.

 

 

The Economic Advisory Council (EAC) on Thursday raised concern about the slow rate at which the nation’s economy is growing.

The team called President Muhammadu Buhari’s attention to the situation during a meeting held at the Presidential Villa in Abuja.

Led by Professor Doyin Salami, the eight-member council noted that the economy was improving at a slower pace compared to that of the nation’s population.

Presenting their report, Professor Salami, supported by interventions by Council members, responded to questions by the President and his team.

They outlined some of the challenges facing the economy and proffered solutions to most of them.

 

The Way Forward

The Council asked the Federal Government to strengthen national statistical agencies, reform procurement processes, improve education.

It also stressed the need for job planning in training offered by academic institutions.

EAC also brought to the government its views on borrowing, macroeconomic stability, and the need to provide a friendly climate for foreign investment.

“We need an environment that will attract investment. People will come only when they feel confident and when they come, their exit will not be challenging,” said Professor Salami.

President Muhammadu Buhari with members of the Economic Advisory Council (EAC) at the Presidential Villa in Abuja on February 6, 2020.

 

The council also resolved to focus on legacy projects by the administration before 2023.

In his response, President Buhari gave a firm commitment that his administration would be bound by the council’s advice on economy-related matters.

He, therefore, gave the first directive from EAC’s recommendations that the Secretary to the Government of the Federation, Mr Boss Mustapha, should urgently address the lapses observed in coordination between ministries and all agencies of the government.

“The lack of synergy between Ministries, Departments and Agencies (MDAs) would no longer be accepted,” the President warned in a statement by his media aide, Garba Shehu.

He added, “We are working for the country, not for personal interests. We have the same objective of service to the people and we will resolve this.”

 

The Most Delicate Aspect

Reviewing the work of the Council since its inauguration, President Buhari said, “I am highly pleased based on what I have read in your Executive Summary with the painstaking thoroughness of your preliminary report.

“I have noted the salient points of your report and these will be incorporated in government economic policies.”

The President also spoke about the challenges facing the economy and the tasks that rest on the shoulders of the members.

According to him, the economy is the most delicate and sensitive of all aspects of national life and a little change in the matrix can lead to major disruptions in the nation’s economy.

President Muhammadu Buhari with members of the Economic Advisory Council (EAC) at the Presidential Villa in Abuja on February 6, 2020.

 

“For example, international changes in oil prices, bad harvests, conflicts in strategic global locations, a major epidemic or pandemic like the current coronavirus, tariff changes in major world economies, to mention only a few examples that readily come to mind, can significantly affect our plans,” President Buhari noted.

He also asked the EAC should now brief him more frequently, at least once every six weeks rather than once every quarter.

The President thanked the members for their patriotism and commitment in accepting the challenging responsibilities conferred on them.

In addition to Professor Salami, the Council has Dr Mohammed Sagagi as vice-chairman six economic experts as members.

They are Professor Ode Ojowu, Dr Shehu Yahaya, Dr Iyabo Masha, Professor Chukwuma Soludo, Dr Bismack Rewane, and Dr Mohammed Salisu.

The two ministers in the Ministry of Finance also serve as co-opted members.

Peter Obi Blames Nigeria’s Security Challenges On Poor Economy

The Vice-Presidential Candidate of the Peoples Democratic Party (PDP) in the 2019 general elections, Mr Peter Obi has decried the security situation in the country.

 

The Vice-Presidential Candidate of the Peoples Democratic Party (PDP) in the 2019 general elections, Mr Peter Obi has blamed the nation’s security challenges on the poor economy.

Obi, who was a guest on Channels Television’s Sunday Politics, faulted the Federal Government for its policies that have contributed to the state of the economy.

“Apart from the armed bandits which we all know are killing everybody everywhere, we have also the upsurge in all forms of criminalities whether it is kidnapping, robbery, all sorts of crimes are on the increase.

“And that also is what you need to deal with. How do you tackle it? Economy. If you have 98 million people, the consequence is that maybe there are several million who do not know where the next meal will come from,” he said.

Speaker further, Obi said Nigeria has the highest number of poor people in the world, more than China and India.

He also decried the unemployment situation in the country, stressing that the gradual collapse of the economy is to be blamed.

READ ALSO: Insecurity: Situation In Northeast Is Getting Worse – Senator Ndume

Reacting to the calls for the sack of the nation’s service chiefs, Obi believes doing so will not solve the numerous security threats the country grapple with.

“If I look at people saying the Inspector General of Police should go, I have seen several IGP and I have worked with them.

“This particular one, I have not met him but I can tell you that he has conducted himself in what I call a decent manner, especially in the way he speaks,” he said.

Obi’s comments follow that of a lawmaker representing Borno South Senatorial District in the National Assembly, Senator Ali Ndume who decried the situation in the Northeast saying it is getting worse by the day.

Ndume had while speaking on Sunday Politics, regretted that the resurgence of the Boko Haram /Islamic State of West African Province (ISWAP) keeps increasing.

Sixty Years On, Africa Still Seeks Right Model For Growth

 

 

As 1960 dawned, sub-Saharan Africa braced for historic change: that year, 17 of its countries were destined to gain independence from European colonial powers.

But six decades on, the continent is mired in many problems. It is struggling to build an economic model that encourages enduring growth, addresses poverty and provides a future for its youth.

Here are some of the key issues:

Youth ‘explosion’

Africa’s population grew from 227 million in 1960 to more than one billion in 2018. More than 60 percent are aged under 25, according to the Brookings Institution, a US think tank.

“The most striking change for me is the increasing reality of disaffected youth… a younger population that is ready to explode at any moment,” Cameroonian sociologist Francis Nyamnjoh told AFP.

“They are hungry for political freedoms, they are hungry for economic opportunities and they are hungry for social fulfilment .”

Joblessness is a major peril. Unemployed youths are an easy prey for armed groups, particularly jihadist movements in the Sahel, or may be tempted to risk clandestine emigration, often at the cost of their lives.

The continent’s population is expected to double by 2050, led by Nigeria, Ethiopia and Democratic Republic of Congo (DRC).

Poverty and inequality

The proportion of Africa’s population living below the poverty line —- less than $1.90 (1.7 euros) per day —- fell from 54.7 percent in 1990 to 41.4 percent in 2015, according to the World Bank.

But this average masks enormous differences from one country to another, exemplified by Gabon (3.4 percent of the population in 2017) and Madagascar (77.6 percent in 2012).

“The inequalities between countries are as extreme as in Asia and the inequalities within countries as as high as in Latin America, where landless peasants coexist with huge landowners,” said Togolese economist Kako Nubukpo.

Christophe Cottet, an economist at the French Development Agency (AFD), pointed out that inequality in Africa is “very poorly measured.”

“There are notably no figures on inequalities of inherited wealth, a key issue in Africa.”

Mega-cities and countryside

Recent decades have seen the expansion of megacities like Lagos and Kinshasa, typically ringed by shantytowns where people live in extreme poverty, although many medium-sized cities have also grown.

More than 40 percent of Africans now live in urban areas, compared with 14.6 percent in 1960, according to the World Bank.

In 1960, Cairo and Johannesburg were the only African cities with more than a million residents. Consultants McKinsey and Company estimate that by 2030, about 100 cities will have a million inhabitants, twice as many as in Latin America.

But this urban growth is not necessarily the outcome of a rural exodus, said Cottet.

“The population is rising across Africa as a whole, rather faster in towns than in rural areas,” said Cottet.

“There is also the problem of unemployment in towns — (rural) people have little interest in migrating there.”

Lost decades of growth

Growth in Africa slammed to a halt in the early 1980s, braked by a debt crisis and structural adjustment policies. It took two decades to recover.

Per-capita GDP, as measured in constant US dollars, shows the up-and-downs, although these figures are official and do not cover Africa’s large informal economy: $1,112 in 1960, $1,531 in 1974, $1,166 in 1994 and $1,657 in 2018.

“If you do an assessment over 60 years, something serious happened in Africa, with the loss of 20 years. But there is no denying that what is happening now is more positive,” Cottet said.

The IMF’s and World Bank’s structural adjustment programmes “broke the motors of growth,” said Nubukpo, whose book, “L’Urgence Africaine,” (The African Emergency) makes the case for a revamped growth model.

The belt-tightening programmes “emphasised the short term, to the detriment of investments in education, health and training.”

New thinking needed

Africa has a low rate of industrialisation, is heavily dependent on agriculture and its service sector has only recently started to emerge.

“We have not escaped the colonial model. Basically, Africa remains a producer and exporter of raw materials,” said Nubukpo.

He gave the example of cotton: 97 percent of Africa’s cotton fibre is exported without processing — the phase which adds value to raw materials and provides jobs.

For Jean-Joseph Boillot, a researcher attached to the French Institute for International and Strategic Affairs, “Africa is still seeking an economic model of development.”

“There is very little development of local industries,” he said.

“This can only be achieved through a very strong approach, of continental industrial protection — but this is undermined by the great powers in order to pursue free trade.

“The Chinese, the Indians and Westerners want to be able to go on distributing their products.”

Governance problem

Lack of democracy, transparency and efficient judicial systems are major brakes on African growth, and wealth is concentrated in the hands of a few, said the experts.

Of the 40 states deemed last year to be the most world’s most corrupt countries, 20 are in sub-Saharan Africa, according to Transparency International.

“Africa is not developing because it is caught in the trap of private wealth and the top wealth holders are African leaders,” said Nubukpo.

“We must promote democracy, free and transparent elections to have legitimate leaders who have the public interest at heart, which we absolutely do not have.”

Nyamnjoh also pointed to marginalised groups — “There should be more room for inclusivity of voices, including voices of the young, voices of women.”

Spain Votes In Repeat General Election Amid Catalonia Tensions

 

Spain voted Sunday in its fourth general election in as many years amid heightened tensions over the separatist push in Catalonia that has fuelled a surge in support for upstart far-right party Vox.

The repeat polls were called after Prime Minister Pedro Sanchez failed to secure support from other parties following an inconclusive election in April which saw his Socialist party win the most votes, but no working majority in parliament.

Opinion polls however suggest this new election will fail to break the deadlock. Neither the left nor the right look likely to win a ruling majority in Spain’s 350-seat parliament.

The Socialists are on track to finish top again, but with slightly fewer seats than the 123 they picked up in April, while the main opposition conservative Popular Party (PP) may strengthen its parliamentary presence.

But the most striking development could be the rise of the far-right Vox party, which might even jump to third-largest in parliament, according to polling.

Party leaders from across the political spectrum urged Spaniards to head to the polls.

Sanchez told reporters after voting in Madrid that “it is very important that we all participate to strengthen our democracy” and “have the needed stability to be able to form a government”.

The last election produced a near-record 76 percent turnout, which helped Sanchez who had mobilised left-leaning voters to oppose Vox but analysts warn the numbers will likely drop this time, as Spaniards suffer election fatigue.

Voting stations will close at 8:00 pm, with results expected a few hours later.

‘Put order’

The election comes as Spain finds itself increasingly polarised by the Catalan crisis, which has deepened in recent weeks.

Less than a month ago, the Supreme Court sentenced nine Catalan separatist leaders to lengthy jail terms over their role in a failed 2017 independence bid, sparking days of angry street protests in Barcelona and other Catalan cities that sometimes turned violent.

More than 600 people were injured in the protests, which saw demonstrators torching barricades and throwing stones and Molotov cocktails at police.

During a TV election debate PP leader Pablo Casado called for a “real government that will put order in Catalonia”.

But the toughest line against the Catalan separatists has come from Vox leader Santiago Abascal.

“Drastic solutions are needed,” he said during his final campaign rally on Friday night in Madrid.

He then repeated his pledge to end the Catalan crisis by suspending Catalonia’s regional autonomy, banning separatist parties and arresting its regional president, Quim Torra, who has vowed to continue the secession drive.

The crowd responded by chanting “Torra to the dungeon”.

At the rally, Ana Escobedo said she has voted for the PP in the past but was drawn to Vox because of its hard line on Catalonia as well as illegal immigration.

“I think we need to take a heavy hand,” she said.

‘Remain difficult ‘

Vox won 24 seats in parliament in the last election in April, in the first significant showing by a far-right faction since Spain’s return to democracy following the death of dictator Francisco Franco in 1975.

This time Vox could double that number, polls suggest.

In recent days, Sanchez has repeatedly raised the alarm about Vox’s “aggressive ultra-rightwing” policies, warning the party would drag the country back to the dark days of Franco’s dictatorship.

Spain has been caught in political paralysis since the election of December 2015 when far-left Podemos and business-friendly Ciudadanos entered parliament.

That put an end to decades of dominance of the two main parties, the PP and the Socialists, in the eurozone’s fourth-largest economy.

But there is a risk Sunday’s vote will only prolong the agony.

With no single party able to secure the required 176 seats for a majority, the Socialists are likely to opt for a minority government, ING analyst Steven Trypsteen said.

“Voting intentions appear to have changed since the April election. But these changes will not make it easier to form a government, so the political situation is likely to remain difficult after this weekend’s vote,” he added.

European Governments Move To Veto Facebook’s Digital Money

 

Major European players are joining forces to block Facebook’s proposed digital currency because of the dangers it poses to national sovereignty, French Economy Minister Bruno Le Maire announced Friday,

The firm opposition from France, Italy and Germany added to the mounting resistance faced by the tech giant’s troubled foray into digital finance.

The Group of 20 economies also warned Friday of “serious” risks of money laundering, fraud and illicit finance posed by Libra, the social media network’s digital currency.

Italy, Germany and France will take unspecified steps in the coming weeks “to show clearly that Libra is unwelcome in Europe because our sovereignty is at stake,” Le Maire told reporters on the sidelines of the annual meetings of the World Bank and International Monetary Fund in Washington.

“We will not allow a private company to have the same power, the same monetary power as sovereign states,” he added.

“The major difference between Facebook and governments is that we are subject to democratic control, that is the control of the people.”

The Group of Seven economies on Thursday had said any reserve-backed digital currency like Libra — known as a stablecoin — would require a sound legal framework before entering circulation.

But European officials say they want to go even further by blocking the currency outright.

Like Le Maire, German Finance Minister Olaf Scholz also said Friday he was “very skeptical” about Libra.

“I favor not allowing the establishment of such a global currency because that is the responsibility of democratic states,” he said.

But Scholz said he recognized the need for banking reforms to make cross-border payments more simple, cheap and speedy.

Answer: a clear ‘no’

“At the same time, we must protect the autonomy of democratic states,” he said.

Libra also has faced challenges from within after major financial and commercial players in recent weeks have backed out of the project, including Visa, Mastercard, eBay, Stripe, PayPal and the online travel firm Bookings Holdings.

But the Libra Association has tried to ward off a blockade by saying it will address the concerns posed by government officials.

“I repeat our priority today is to work with regulators to answer their legitimate questions and provide all necessary assurances,” said Bertrand Perez, managing director of the association.

Le Maire, however, appeared to rule out such cooperation with Facebook, noting that the social media giant planned to tie its cryptocurrency to a basket of reserve assets.

“All Facebook would have to do would be to decide to use more or fewer dollars or euros to affect the exchange rate between the euro and the dollar, and thus have a direct impact on trade, industry and nations which use the dollar or euro as their base currency,” he said.

This could harm monetary policy and affect governments’ efficiency, he added.

“Do we want to put monetary policy in the hands of a private company like Facebook? My answer is clearly no,” he said.

Still, he said he was not opposed to the creation of a digital currency, which France could develop “in a European framework.”

“The right answer is not a private digital currency under the control of one of the largest multinationals on the planet,” he said, referring to Facebook’s more than two billion users.

The Libra association officially launched Monday in Geneva with 21 founding members, including the telecoms firms Vodafone and Iliad, as well as tech outfits Uber, Spotify and Farfetch, blockchain operations such as Anchorage, Xapo and Coinbase and the venture capital firm Andreessen Horowitz.

Mnangagwa Begs For Patience To Fix Zimbabwe’s Ailing Economy

Zimbabwe’s President Emmerson Mnangagwa speaks during the Defence Forces Day celebrations held at the National Sports Stadium in Harare on August 14, 2018. Jekesai NJIKIZANA / AFP

 

President Emmerson Mnangagwa on Tuesday acknowledged the economic hardships Zimbabweans are suffering and pleaded for patience to allow his government to fix the country’s rapidly deteriorating economy.

Zimbabwe’s economy has been badly suffering for two decades but the last 12 months have been the worst decline in 10 years, characterised by shortages of basic goods such as fuel and electricity.

Even when such goods are available, they are often unaffordable for most Zimbabweans.

Annual inflation neared 300 percent in August, according to the International Monetary Fund.

The government has been introducing what economists have called “piecemeal” policies to raise revenue, fix currency distortions and increase cash liquidity.

But Mnangagwa was upbeat in an annual speech to parliament on Tuesday, saying that his government’s economic reforms “are beginning to bear fruit”.

“I am aware of the pain being experienced by the poor and the marginalised”, but “getting the economy working again will require time, patience, unity of purpose and perseverance”.

The local currency has fallen from parity against the American dollar to 16.5 Zimbabwean dollars (ZWL) since June, when the treasury introduced currency reforms in a bid to address the chronic monetary crisis.

The local unit briefly breached 20 against to the greenback last week before clawing back a little value.

“Last week’s events of exchange rate manipulation amounts to economic sabotage and should not be tolerated,” said Mnangagwa, referring the near crush of the currency which saw the central bank freeze bank accounts of a Zimbabwean company linked to global commodities trader Trafigura.

On Monday the central bank unexpectedly shut down the use of mobile phone banking for cash transactions, citing exorbitant commission fees.

Years of economic crisis have left the country short of bank notes and commercial banks have been rationing cash withdrawals to a maximum daily limit of 100 ZWL (US$10) per customer.

That limit has led many Zimbabweans to turn to electronic financial transactions as well as using mobile transfers to buy cash.

Mnangagwa said he was “fully aware of the challenges faced by the public in accessing cash, which has resulted in some unscrupulous traders selling cash in exchange for electronic money” and promised to fix the problem.

Nelson Chamisa, the leader of the main opposition party Movement for Democratic Change, said that a state-of-the-nation address “that does not address key issues facing the nation such as lack of electricity, water, fuel, non availability of cash, poor wages, human rights abuses, terror, abductions, illegitimacy and reforms is a waste of resources and an unprovoked insult”.

“This invites us all to act!” Chamisa said after his lawmakers walked out of parliament shortly before Mnangagwa stood up to deliver his speech.

A UN special rapporteur Clement Nyaletsossi Voule visited Zimbabwe last week and concluded that “there is a serious deterioration of the political, economic and social environment since August 2018”.

Mnangagwa won a July 30 election last year, taking over after 37 years of authoritarian rule under Zimbabwe’s founding president Robert Mugabe, who died in hospital last month.

AFP

Buhari Reiterates His Commitment To Development In Trade, Business Sector

 

President Muhammadu Buhari has reiterated his administration’s commitment to ensuring that the trade and business sector continues to flourish.

He gave the assurance while addressing a delegation from the Nigerian Association for Chamber of Commerce, Industry Mines and Agriculture (NACCIMA), the Federation of West African Chambers of Commerce and Industry (FEWACCI) and representatives of the Organised Private Sector (OPS) at the State House in Abuja.

The President, however, urged Nigerians to play by the rules in the area of trade and business which he believes are critical to Nigeria’s economic development.

 

According to him, markets have been flooded with smuggled and counterfeit goods as a result of non-adherence to rules.

He, however, stated that the temporary closure of the nation’s borders has yielded results and has helped in reducing the rate of smuggling.

Economic Council Team Competent, I Hope Buhari Listens To Them – Moghalu

A former Deputy Governor of the Central of Nigeria (CBN) Kingsley Moghalu on Tuesday said the members of the newly inaugurated Economic Management Team (EMT) are competent and he hopes President Muhammadu Buhari’s will listen to them.

Moghalu disclosed this in an interview on Channels Television’s Politics Today.

“This Council will advise the President but we hope that the President will listen to their advice. The team as composed in this Council is a competent team, there is no question about it.

“But we want to see that he will listen to their advice. When the Council advises the President, if the President agrees with their advice, he should now direct the ministers to execute these economic agendas,” he said.

Moghalu, who is also the presidential candidate of the Young Progressives Party (YPP), explained that the ministers will not be part of the EMT because they are burdened with the responsibility of managing the nation’s economy.

The former Deputy Governor of the Central of Nigeria (CBN), Professor Kingsley Moghalu says the members of President Muhammadu Buhari’s Economic Management Team are competent.

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He also called on the Federal Government to effectively engage with and consult the private sector, adding that Vice President Yemi Osinbajo should be carried along with key economic decisions of the Council.

When asked of his views on President Buhari’s efforts to lift over 100 million Nigerians from poverty, Professor Moghalu noted that was a good initiative.

He concluded that for the feat to be made, the Federal Government must put in place the needed blueprint that will be a work in progress, adding that “a foundational economic philosophy for the Nigerian state” must be created.